Cryptocurrency Regulations: A free guide to global crypto-regulatory environments to help navigate various legislative positions towards cryptocurrency.
As cryptocurrencies spread across the globe, so too do the regulations put in place to try and govern them. The landscape is constantly evolving and keeping up to date with the rules in different territories isn’t easy. To help you navigate the various legislative positions towards cryptocurrencies, and the activities associated with them, we’ve put together this guide. Learn how different nations approach coin and exchange regulation and if they have any upcoming legislation which could alter their approach to cryptocurrencies.
Cryptocurrencies: Not considered legal tender
Cryptocurrency exchanges: Legal, regulation varies by state
It’s hard to find a consistent legal approach to cryptocurrencies in the United States. Laws governing exchanges vary by state, and federal authorities actually differ in their definition of the term ‘cryptocurrency’. The Financial Crimes Enforcement Network (FinCEN) doesn’t consider cryptocurrencies to be legal tender but since 2013 has considered exchanges as money transmitters (subject to their jurisdiction) on the basis that tokens are “other value that substitutes for currency”. The IRS, by contrast, regards cryptocurrencies as property – and has issued tax guidance accordingly.
Cryptocurrency exchange regulations in the United States are also in an uncertain legal territory, and several of the federal regulators claim jurisdiction. Of the major US regulatory bodies, the Securities and Exchange Commission (SEC) has indicated that it considers cryptocurrencies to be securities: in March 2018 it stated that it was looking to apply securities laws comprehensively for digital wallets and exchanges. By contrast, The Commodities Futures Trading Commission (CFTC) has adopted a friendlier, “do no harm” approach, describing bitcoin as a commodity and allowing cryptocurrency derivatives to trade publicly.
The Justice Department is coordinating with the SEC and CFTC over future cryptocurrency regulations to ensure effective consumer protection and more streamlined regulatory oversight. The US Treasury has emphasized an urgent need for crypto regulations to combat global and domestic criminal activities and, in January 2018, Treasury Secretary, Steve Mnuchin, announced a new FSOC working group to explore the increasingly crowded cryptocurrency marketplace.
Cryptocurrencies: Not legal tender
Cryptocurrency exchanges: Legal, regulation varies by province
Cryptocurrencies aren’t legal tender in Canada but the Canada Revenue Agency has taxed them since 2013. Canada has been fairly proactive in its treatment of cryptocurrencies: back in 2014 it brought entities dealing in virtual currencies under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, while in 2017 the British Columbia Securities Commission registered the first cryptocurrency-only investment fund.
Cryptocurrency exchange regulations in Canada are inconsistent at the provincial level, but at the federal level, the authorities treat cryptocurrencies as securities. In August 2017, the Canadian Securities Administrators (CSA) issued a notice on the applicability of existing securities laws to cryptocurrencies, and in January 2018, the head of Canada’s Central Bank characterized them “technically” as securities.
More regulation on crypto exchanges is on the way. In response to its mutual evaluation by FATF, Canadian authorities issued draft amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in June 2018. The revised regulations will now include cryptocurrency exchanges – meaning those entities are subject to reporting obligations, and essentially regulated in the same way as Money Services Businesses.